Analysis of the steel industry in Europe

The year 2017 can be a significant turning point and the analysis of the European steel industry will be made. A combination of anti-dumping measures and some major mergers seem to be solving the problems faced by the industry.

Most of Europe’s leading steel companies are turning a profit again after a revival in steel prices in 2016. 2017 could be the year in which major capital infusions and intensive acquisitions will take place.

ArcelorMittal has focused on reducing indebtedness. And in partnership with Marcegaglia, it made the final offer to take over the Italian steel company, Illva. An investment plan of €2.3 billion has been revealed. To improve the use of capacity and environmental performance.

A Jefferies analyst suggested that the acquisition would increase the company’s market share. For flat steel at 40% from 33% currently. While a competitor who has often acted as an anchor is eliminated. At the level of prices in the region.

„At the heart of our plan are investments of over two billion euros. These will bring the necessary transformations to Ilva on the environmental side. But they will also lead to the improvement and reorientation of Ilva towards high value-added products. The ArcelorMittal – Marcegalia consortium also brings the advantage of commercial contracts in Europe. What will facilitate Ilva’s reintegration into the market. Including as the main supplier on the Italian market.” Aditya Mittal, CEO of ArcelorMittal Europe, said in an official statement from the company.

As strategic objectives, ArcelorMittal and Marcegalia aim to bring Ilva’s production back from 6 million tons of steel per year to 9.5 million tons of steel by 2018. In addition to the refurbishment plans, a research and development center for new products will be built in Taranto.

Analysis of the European steel industry for a possible merger

The second and third largest players in the European flat steel sector are engaged in their own discussions on a potential merger. German companies ThyssenKrupp and Tata Steel have been officially in talks since June last year, and a number of hurdles have been cleared in the past two weeks.

The industry is eagerly awaiting the release of January’s import figures to see if the official figures reflect speculation that import activity has been weaker. As of January, imports of hot-rolled products from Russia and Brazil may be subject to retroactive duties. Other measures could also be applied for steel from Ukraine, Serbia and Iran, when provisional duties are announced in April.

As a result, many market analysts suggest that the real impact of anti-dumping measures is still expected to be felt in 2017, it could be an inflection point, when the low volume of imports will reduce the pressure on domestic producers.

Article source: http://blogs.platts.com/2017/03/08/2017-european-steel-industry/